Fannie Mae extended duration by shifting from short- to long-term debt, but allowed overall debt to grow. Freddie de-levered by cutting short-term debt without adding to long-term debt.
Since 2016, when the duty-to-serve rule compelled the GSEs to make it easier to buy homes in rural census tracts, home prices have remained mostly stable and rents have declined.
The move will increase the size of eligible loans and the number of units allowed, but stiffer qualification requirements may alienate smaller landlords.
Trump budget ignores GSE reform; Morningstar DBRS affirms AAA ratings on GSEs; Vice Capital an early adopter of new low loan balance payment categories; Fannie to simplify income eligibility calculations for some LLPA waivers.
The Treasury Market Practices Group released a white paper identifying how a change in the ownership structure of Fannie Mae and Freddie Mac could impact the broader financial markets.